EU institutions have classified Circle's USDC as "significant" under MiCA.
The second-largest stablecoin by market capitalization will be jointly supervised by French and European Union regulators after being classified as a "significant electronic money token."
The European Banking Authority (EBA) has classified Circle's USDC stablecoin as a significant electronic money token under the European Union's Markets in Crypto-Assets Regulation (MiCA) framework.
On Wednesday, the banking regulator stated in an announcement that this classification as an electronic money token had previously been granted to only 45 other projects. This classification effectively means that the USDC stablecoin will be jointly regulated by the European Banking Authority and France’s Autorité de Contrôle Prudentiel et de Résolution. By market capitalization, this stablecoin is valued at $73 billion, compared to Tether’s USDt at $184 billion.
At the time this "important" category was introduced, many token issuers based in the EU are pushing for the launch of regulated USD-pegged stablecoins in the region. James Bennett, CEO of Stable Mint, told Cointelegraph that while European regulators cannot "eliminate" USD stablecoins out of thin air, they can regulate the safeguards and rules implemented by issuers.
Alexander Höptner, CEO of AllUnity, told Cointelegraph: “For European businesses, offering only euro stablecoins is not sufficient if they want to conduct cross-border payments globally.”
As regulators and issuers move closer to accepting USD-backed stablecoins, policymakers at the European Central Bank are still exploring the possibility of launching a digital euro. The European Union’s relevant bodies first proposed this central bank digital currency concept as early as 2020, and the currency could be issued as soon as 2029, following the completion of legislation and pilot programs.
Related reading: Qivalis obtains a Dutch electronic money license for its euro stablecoin